trade
Fund ("ETF" for short) is an open-end fund with variable fund share, in which white is listed and traded on the exchange. Combined with the operating characteristics of closed-end funds and open-end funds, investors can purchase or redeem fund shares from fund management companies, and at the same time, they can buy and sell ETF shares in the secondary market at market prices like closed-end funds. However, the purchase and redemption must be exchanged for a basket of shares or a basket of shares.
The difference between ETF and general fund
1. Ordinary open-end funds cannot be listed and traded, while ETF funds can. The so-called floor trading means that in the secondary stock market, some fund varieties can be listed and traded, such as closed-end funds, LOF funds and ETF funds. ETF fund is a kind of trading open index fund, which is usually called Exchange-traded fund (exchange
Trading funds ("ETFs").
2. Ordinary funds are open-end funds, and the total share is not fixed, that is, a large number of people will apply for redemption every day. When the total redemption amount is greater than the total subscription amount, it is called net redemption. In order to meet the demand of net redemption, open-end funds will set aside at least 5% cash to deal with this situation, so the investment position of ordinary funds can reach 95% at most, but it is impossible to reach 100%.
ETF fund positions traded on the floor can reach 100%. Because the share is fixed, people who want to buy the fund will buy it from others, which will not have any impact on the total assets of the fund.
The difference between ETFs and ordinary funds is that ETFs can be listed and traded, while ordinary funds are open-end funds, which are bought and sold through subscription and redemption, while ETFs are from Man Cang, but ordinary funds are not.